Posted by CM on August 19, 2009
A couple recently sold their home and submitted an offer to buy another home. This new home was damaged from flooding during a hurricane. The couple wanted to purchase the home to fix it up. Well, their first mortgage company refused to appraise the house for the offered price and instead kept lowering the price. So, the couple went to Bank of America and found a loan officer who would approve a “drive by” appraisal. The real estate agent then took all the photographs off of the internet and put curtains on the windows so that all the appraiser could see was the outside of the house. And low and behold, the house appraised for the exact amount that the couple offered on the house.
In today’s New York Times, there is an article about the appraisal business. The Home Valuation Code of Conduct now says that “brokers and real estate agents can no longer order appraisals, only lenders can.” Evidently folks in the mortgage industry feel that only unethical appraisers are getting the jobs with the new code. Based on the story above, I would agree with their argument.
Source: In Appraisal Shift, Lenders Gain Power and Critics. By David Streitfeld for The NYTimes 8/18/09